Taxing and spending

A few thoughts on Tax Day 2013: I am really tired of Barack Obama, Warren Buffet, Bill Gates, et al, complaining that they pay too little in income taxes. Quit whining, get out your checkbook, and send in whatever amount you think is fair. And here is what will happen with those checks: The black hole that is the Obama budget/deficit will swallow that money with nary a hiccup or a thank you. By the end of next week, there will not be a hint of a dent in Obama’s deficit. Our nation does not have an income (tax) problem; we have a spending problem.

Jeff Kleinholz, Aurora

This letter was published in the April 16 edition.

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“A few thoughts on Tax Day 2013: I am really tired of Barack Obama,
Warren Buffet, Bill Gates, et al, complaining that they pay too little
in income taxes. Quit whining, get out your checkbook, and send in
whatever amount you think is fair.”
=======
The problem isn’t really that they “know” they don’t pay enough; the problem is that they can’t figure out what to do about it unless their “generosity” is Codified into Federal Law.

Liberals typically “give” in only one of two ways: (1A) People like Bill Gates will give to their own Charity Foundation that bears their own name (to much media fanfare) and (1B) when their own Charity Foundation that bears their own name gives away money (to much media fanfare) (2) when “forced” to by the Tax Laws (to the deafening silence of the media)

To many rich Liberals who “know” they make too much money, “know” they have too much money, and “think” “everyone” is just like them……..”anonymous” “charitable” contributions are contrary to both their nature and their personality……..UNLESS the “charity” they “anonymously” contribute to is the “same charity” they “force” EVERYONE to “contribute” to: The Government via Taxes.

Thus the Liberal Solution is to force EVERYONE in “their” tax bracket to pay more……so that they can be :”forced” to pay more…….which actually gives them a sense of relief…..because simply writing a check and voluntarily paying more…….actually would cause them stress…….because it would go against their nature and personality.

TomFromTheNews

I believe the President DID pay more than what he owed.

ThePyro

This isn’t meant as a slam against the President, it’s a process response.

I don’t think he CAN pay more than what he owes (nor can anyone else). I spoke to a tax accountant friend, and he indicated that the IRS will not accept additional payment and any extra that isn’t taken back (e.g., if people don’t cash the resulting refund check), the money remains in limbo and cannot go into general funds. This is similar to organizations like GSA being unable to take refunds or rebates for items purchased.

Now, it’s possible the President made a gift to the US Government, which is possible through the IRS via a separate system, and said he paid more (since the general public, like me, wouldn’t have understood the technical process). If he did so, props to him for putting his money where his mouth is.

peterpi

I just saw an article online.
The president paid an effective tax rate of 18%. Last year, he donated 24% of his gross income to various charities, which he claimed deduction for, just like every other American can. He had a tax refund due him, but he applied it to next year’s taxes. Something I didn’t know taxpayers could do.
Now regarding paying excess taxes. It may be that you can’t tell the IRS to keep it, but I bet you can send a contribution to the US Treasury. Since the US government is not a not-for-profit organization, I don’t know if a donation to the US Treasury is deductible.
If it is deductible, and “if” I made a very hefty taxable income, I’d seriously consider donating money to NASA, HHS, Agriculture Dept, food stamps program, deduct the donations, and thus completely redirect where my income taxes would flow. Which is another reason why I think gifts to the US Treasury are not tax-deductible.

ThePyro

Saw the same info on the President’s taxes in various places, and that he had less income and other stuff…the kind of blah, blah, blah that I’m sure will get spun seven or eight different ways by the end of the week.

You can pay forward on your tax bills, as it turns out. It’s mostly beneficial for businesses and individuals who tend to get paid in large chunks (e.g., quarterly, semiannually, annually). For the average taxpayer, it doesn’t make a lot of fiscal sense, so not a lot of people do it…and hence, you don’t hear much about it.

On the gift to the government, I was wrong as to which agency would take it; it’s actually Treasury…and you can find info at:
www(dot)fms(dot)treas(dot)gov/faq/moretopics_gifts(dot)html

It appears that the money goes to general funds (at least per the description), and I’ve not been able to find that you can direct it to specific programs, like you can with non-profits. Nor could I find anything about tax-related matters except a link to the main page of the IRS…and nothing on the first hundred or so pages of the IRS search. (Nice to know that the two agencies most responsible for our money can be so helpful.)

Most of the discussion I’ve seen is about whether it’s fiscally and/or morally right to pay extra taxes…which seems all rather hypothetical since it appears that you can’t anyway. But, if I were in a Cabinet position right now, this gift process is one of those “small” things I’d be changing and promoting. Can you imagine the political (and hopefully financial) score that someone could make if they stood up and said “Well, under tax law you can’t pay extra taxes – but here’s the way you can help with reducing the debt or funding your favorite programs.”?

toohip

Thanks for the correction on your research. Noble. I don’t think many people other than the uber rich or to make a political point,would consider making charitable donations to the U.S. Treasury. Wouldn’t it just be easier to have everyone pay their “fair share,” based on the amount of income they receive rather than the number of loopholes created for people with “special incomes?”

guest

Problem is that almost all loopholes are created to benefit not just an individual (although that sometimes happens) but to motivate certain behavior (at least that’s what the left wants to do). Don’t you remember Democrats calling for targeted tax cuts? The problem they have is when they work, they may not like the people who are taking advantage of them.

As for your question “wouldn’t it just be easier to have everyone pay their fair share (weaselly language).” That’s what a flat rate tax is, but the left resists that concept.

toohip

you mean like “giving to charity”? The Mormon Church is a charity? So what do corporate tax loopholes “target” or “motivate certain behavior?”

No what the right feels is a “fair flat tax” is the same tax rate you and I pay for the very rich – the ultimate “tax cuts for the rich!” What a deal!

guest

The domestic manufacturing tax deduction. This is a tax deduction given to every manufacturer in the US. Per CNN, it was “designed to keep factories in the United States.” This is one of the “subsidies” the left wants to eliminate for Oil companies. If that deduction were eliminated for oil companies only, it would mean singling out oil companies from all other
manufacturers.

There are a number of versions of the flat tax. One idea is to make a certain amount tax free. Anything above that amount would be taxed at 18-22 percent (somewhere in that range, not different rates for different amounts). It certainly would make doing your taxes a lot easier.

ThePyro

Thank you on the first bit.

I don’t think they would, either…but I still think it’d be an awesome way from a political perspective to tell people to put their money where their mouth is.

I dunno about easier, though…to revamp a little known, potentially misunderstood program and then turn it into a political and economic reality might be easier than making any kind of revision to the closely-watched tax code.

toohip

Remember when Romney altered his tax return (legally) by reducing the “allowable ” (Mormon church) charitable deductions so his effective tax rate was 14.1% so the reality of what the rich pay compared to the middle class didn’t look so bad before the election. Later (post-election) he corrected that tax return to take all allowable deductions, and paid an effective rate of 13.6%. Everyone raise their hand who paid a higher tax rate than millionaire (off-shore hidden investments) Mitt Romney!

guest

And what rate did Obama pay this last year? Oh, yeah, 18.4%. What rate did you pay?

toohip

I paid more than Mitt. You?

peterpi

You mean you paid a higher rate than Mitt. I doubt you paid more taxes.

guest

If he actually paid more than Mitt, I need to start treating him better.

peterpi

Typical., You ignore he donated more than 20% of his income, which affected his effective tax rate.
Why, I bet even conservatives deduct their charitable giving on their tax returns.
What percentage did you donate last year?

primafacie

There won’t be too many hands, unless they also had a large portion of their income in capital gains, rather than direct salary. But that’s apparently bad now.

I’m old enough to remember when it was admirable to be rich, when we celebrated high earnings and profits from GM and U.S. Steel and Exxon, when we strived to get there ourselves.

toohip

I think if you check your tax return, prima, you see you paid more than 13.6% so you can raise your hand!
I don’t think “admiring the rich” is something from our past, it’s something that’s really never lost favor or even political incorrectness. I think a fundamental difference in this admiration is “HOW” they became rich.

primafacie

Indeed, I bungled my response and have since edited. Yeah, I probably paid more than 13.6 percent. But I also didn’t take a large portion of my income in capital gains. I worked last year.

peterpi

Never one to pass up attacking public education, eh? Even in a discussion of taxes.
You could have said “Forgive my pathetic math skills, I only have ten fingers …”, but, noooo!
I have two nephews in CA public schools. Their math skills are fine. Hmmmm … maybe it isn’t CA …

Pyro, I’d give your song and dance a 27, . . nice beat, but hard to dance to (ala Bandstand). So what’s your point that one can’t pay more taxes than owed or that un-cashed refund checks don’t go back to the treasury? The fact that Obama gave back 5% of his salary is easily overlooked by the right. Only two presidents gave their entire salaries to charity. One was Kennedy, the other a Republican. Name him!

ThePyro

Yes – that’s my point. I haven’t overlooked anything you said in the rest, but it isn’t pertinent to the point of the discussion. This about taxes, not his willingness to give back salary – laudable as that is.
Herbert Hoover…and yes, I used the internet to find it. *shrug*
And please find another metaphor. I spent most of my time playing bass in the band, and my dancing isn’t nearly as good as you seem to be implying.

toohip

that’s OK, I used internet to see if anyone else then Obama did this. Kennedy gave his to charity 100%. ha! about the metaphor. I could say something about “background” and your commentary but won’t ;o)

ThePyro

Careful there, big man… All I said was that I was too busy playing music to learn how to dance…you’re the one that’s bringing “background” into it.

toohip

Jeff must be one of those angry rich upper 1% that Obama raised taxes on, right? Or he’s a history re-writer ignoring the FACTS that it was his persuasion that did all the “spending” between 2000-2008, including the two wars costing over a $1 trillion, and not even put on the books. Yeah, Jeff, rage, rage, rage against the ignorance of reality and that your tax rates weren’t raised!

holyreality

Government spending (%GDP)is smaller than it has been in decades.
Government jobs has been smallest in decades.
Why are TPers so adamant that the billionaires must not pay any more taxes? to “create jobs”? Maybe overseas, only in the American GOP cult will wealthy people “work harder” if they have more cash while the working classes will “work harder” if they get less.
The REAL job creators in America are the people who spend 100% of their income.

guest

Government spending is smaller than it has been in decades–

No it’s not.

holyreality

If Karl Rove declared 2+2=5 would you believe him too?
Why is government spending such a bad thing? Does it reduce your “liberty” Does it seize precious cash you work so hard for and give it to lazy moochers?

guest

No, but I do believe actual numbers. After WWII spending by the feds dropped to about 18%. In the 50s it stayed there. In the late 60s it jumped up to about 20%. In the 70s it was 20%. In the 80s it went up to about 22%. In the 90s it dropped back to 18% (that’s when we had the surplus). During Bush 43 it went back to 20% jumping to 22% in his last year in office. Obama’s time in office it then jumped to 25% and is now down to 24%. It is lower than during WWII but it is higher than any time other than that in the last 100 years.

Why is it bad? First we are borrowing to spend it at an unheard of rate. Second, government spending right now has a major component that involves redistribution. While some redistribution is good, too much distorts the economy and hurts the incentive of people to improve their lot in life.

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